The Obama administration today announced a wave of funds to advance its health information technology goals. The money comes from the stimulus package approved earlier this year by Congress.

At a forum in Chicago, Health and Human Services Secretary Kathleen Sebelius and Vice President Joe Biden announced the release of $1.2 billion to facilitate the adoption of electronic medical records by health professionals. Sebelius, along with Dr. David Blumenthal, the national coordinator for health information technology, added more detail regarding the announcement in a conference call with reporters Thursday afternoon.

“This is just the first wave of resources invested in health technology aimed at really transforming our paper-driven system to an electronic system over the next several years, providing help and support for hospitals and doctors as they make this conversion,” Sebelius said.

Of these newly released funds, $598 million will be used to create regional extension centers to provide technical assistance to doctors and hospitals. These centers were mandated in the stimulus act, Sebelius said. In addition, $564 million in grants will go to states to help set up information exchanges “to communicate across the lines of health care agencies.” States will administer these exchanges.

Electronic medical records, added Blumenthal, are meant to get information across agencies and health care systems “to be where the patient needs it and where the physician needs that information at any point and time.”

Blumenthal said the funding announced today is designed to help lay the groundwork for physicians and hospitals to pursue yet another pot of federal dollars: Doctors and others who adopt electronic medical records and meet yet-to-be-finalized “meaningful use” standards will be eligible to receive extra Medicare and Medicaid payments. He said the definition of “meaningful use” — another important step in this process — is expected to be final early next year.

Also yet to be settled — security considerations in the electronic medical records adoption process. Blumenthal described this area as “absolutely essential… foundational,” and said an HHS policy committee has been asked to to study the issue. “We do understand that the information that is passed within the health care system has to be secure or else the public won’t have confidence in those electronic health records.”